The bad news is that 2021 will also be filled with immediate challenges, but unlike the novel coronavirus pandemic that began last year, the issues that confront us today — out-of-control health care spending, cost-shifting to patients, budgetary strain — are not a surprise. We have been focused on this issue for years, but the pandemic has accelerated the need to take action.
The question is whether we have the perspective to start a smart conversation about how our health care system should be restructured, addressing not only the need to overhaul how we approach public health, but also the larger question of how we provide — and pay for — medical care.
These are questions that will take on increased urgency over the next year. Budgets will be under pressure, from households dealing with job losses to states struggling with increasing Medicaid enrollees. There will be a push for solutions, some of them long overdue, some of them short-sighted. Change is required, but we’ll need to act thoughtfully by focusing on three critical elements: health care spending, patient needs and sustained innovation.
The first step in approaching the health care landscape in 2021 is to focus on the big picture regarding health care spending. Going after drug prices is often one of the first policy solutions that springs to mind, but targeting drug prices is hardly an efficient way to pinch pennies.
Prescription medicines make up about 17% of overall health care spending. A recent Kaiser Family Foundation analysis found that Americans spend about $500 more annually, per capita, on medicines compared to patients in economically similar countries. But we spend nearly $4,000 more on inpatient and outpatient services, suggesting that even radical reform on drugs wouldn’t move the spending needle.
Radical reform might not impact spending, but it would cripple innovation. Our research at the National Pharmaceutical Council found that physicians attributed 56% of improvement in outcomes over a 20-year period for eight different conditions to medications. That finding has now been bolstered by a new paper in Health Affairs showing that 35% of the 3.3-year improvement in life expectancy between 1990 and 2015 could be explained by medications, almost three times more than all other medical interventions combined.
The second requirement needed to address the challenges of 2021 will be making sure that the patient is front and center in any systemic changes that are considered. There will almost certainly be more of a focus on health technology assessments, making it critical that we understand what is measured when we measure “value” — what’s valuable to an insurance company may not match what’s valuable to the patient. NPC has already published guiding practices on the use of value assessment, which can offer an excellent road map to whether a given approach measures what is truly important, especially for patients.
Similarly, 2021 must be the year when we ensure that cost containment is not the responsibility of the patient. Study after study has shown that forcing patients to pay out-of-pocket for health care services — through higher deductibles, higher co-pays, higher co-insurance — doesn’t make them smarter consumers. It does, however, make them less likely to be adherent and more likely to experience financial distress. Addressing the out-of-pocket burden may be one of the last bipartisan issues remaining in health care, and 2021 needs to be the year that we pull back from this destructive approach.
The final piece of the puzzle needed to calm the turbulence will be ensuring innovation sustainability. Biopharmaceutical developers need incentives to continue to bring forward new medications. A world where breakthroughs are not rewarded is a world without breakthroughs. The list of unmet needs is extensive; there is not a patient community that doesn’t need better, safer or more convenient treatment options.
But the biopharmaceutical industry isn’t asking for a blank check; we need to show the ways that investments are expanding our knowledge. That means not only more therapies, but more tools to demonstrate impact. This will be the year that real-world evidence breaks through as we better learn how and where to apply those data-gathering techniques to provide all parts of the system the critical information on how treatments impact patients in the setting that matters.
If we can see the acceleration of these trends — a focus on the largest areas of spending growth, orienting the economics of the system around the patient and implementing the right incentives to sustainably reward innovation — we’ll end 2021 with a more stable and equitable health system than we have now. Given the extraordinary stresses that we’ve experienced in the past year, we cannot afford to settle for less.
Robert Dubois is the interim president and chief executive officer of the National Pharmaceutical Council.